Water talks hit key phase

In the wake of the regional desalination project, litigation challenging the state-ordered cutback in pumping from the Carmel River is again taking center stage.

With the chances of getting a replacement water source in place by the 2016 deadline appearing more remote after the regional project's demise, and attention shifting to other alternatives, local water officials are hopeful the state Water Resources Control Board will be open to an agreement to relax the cut-off date if a new plan is well under way.

That makes the next few months potentially crucial for confidential mediation discussions arising out of the litigation between local interests and the state. Those talks are expected to decide if there will be an agreement or if the case will head to trial.

The Monterey Peninsula Water Management District and California American Water sued the state Water Resources Control Board shortly after a final cease-and-desist order was approved in October 2009. Peninsula cities and other local interests joined in, the cases were consolidated in fall 2010 and the parties have been in mediation since.

Change in direction

David Laredo, attorney for the water management district, said Cal Am's decision to withdraw its support from the regional desalination project was a game-changer for the mediation talks, which he said had been considered secondary in importance as long as the desal project was proceeding on schedule.

"Now that it appears (the regional project) won't be delivering water and there's some question about whether an alternative project can meet the deadline, it's injected a new reality into the discussion," Laredo said. "It's a significant new direction."

Laredo said the parties are scheduled to meet in mediation twice more — on Feb. 14 and April 11 — before meeting with the judge handling the case on May 8.

Cal Am spokeswoman Catherine Bowie said if there's not an agreement in place by the May hearing, the case will almost certainly go to trial.

Bowie said the state water board has been adamant about not bending on the deadline, underscoring the need to find a new water supply quickly.

Cal Am announced Tuesday that it planned to submit a new water project to the state Public Utilities Commission within three months. A PUC judge directed the firm to produce an update on its pursuit of a water supply and its plans to meet the deadline by March1.

Room for negotiation

State water board spokesman George Kostyrko said the developments on the Peninsula have been closely followed, but the board's position remains that the cutback order is in effect and Cal Am must comply with its terms.

Nevertheless, David Stoldt, general manager for the water management district, said he's cautiously optimistic that tangible progress on a new water supply plan will impress the state water board enough to allow room for negotiation on the deadline.

"We're right to be concerned with the deadline looming, and there should be heightened awareness of the deadline," Stoldt said. "We own that 2016 deadline right now, but as we get closer it's the state water board that will own it. I believe they should be flexible."

Carmel Mayor Sue McCloud, who is among a group of Peninsula mayors who proposed a joint powers authority to help find a new water supply plan, said it's a coin flip.

"There are an equal number of people who feel the state water board will relax the deadline, and those who don't think the board will do so because they'll think we won't follow through," McCloud said.

Others have said privately that the state water board will have to reconsider its position on the deadline because full compliance with the order is virtually impossible.

Fighting the order

Filed in Monterey County Superior Court, the lawsuits were transferred in early 2010 to Santa Clara County Superior Court, where Judge Kevin Murphy has presided over the case.

Murphy allowed the cutback order to proceed in early 2010 by overturning a temporary stay issued by Monterey County Superior Court Judge Kay Kingsley.

Retired Judge Richard Silver has presided over the local mediation efforts.

In its complaint, the water management district alleged the cutback order unlawfully deprives the local community of water, jeopardizing public health and safety and the economy. Some estimates place the economic cost of a full cutback at about $1billion.

A moratorium on new and expanded water connections included in the state order interferes with the water district's management authority and local cities' land-use authority, according to the lawsuit. The district called for less drastic measures.

Cal Am's complaint argued that the order was flawed and unreasonable, that complying with the terms of the order might not be possible, and that the state water board should be focused on development of a new water supply on the Peninsula.

The state water board issued a final order in October 2009 that required Cal Am to comply with a 1995 finding that the company had a legal right to only 3,376 acre-feet per year from the Carmel River — the primary source of water for the Peninsula.

The order established a series of reductions starting in 2009 until Cal Am reached its legal limit by Dec. 31, 2016. The cutbacks would result in a pumping reduction of nearly 70 percent from the 2009 baseline of about 11,000 acre-feet per year.

Cal Am is also required to cut its draws from the Seaside basin through 2021.

The journey toward finding an alternative water source for the Peninsula:

·October 2009: State Water Resources Control Board issues final cease-and-desist order requiring California American Water to cut its pumping from the Carmel River and the Seaside basin by nearly 70 percent by the end of 2016.

·March 2010: Cal Am, the county Water Resources Agency and Marina Coast Water District announce a partnership for the regional desalination project, which would provide a replacement source of water for Peninsula customers. The Ag Land Trust sues Marina Coast, challenging the project's environmental review.

·April 2010: A Santa Clara County Superior Court judge allows the state water board's cease-and-desist to proceed, overturning a temporary stay issued by a Monterey County Superior Court judge. The parties to a lawsuit challenging the order will end up in mediation.

·May 2010: Formal review of the proposed regional desalination project begins at the state Public Utilities Commission.

·October 2011: Cal Am unveils a study of potential alternative water supply projects in case the regional project fails. Curtis Weeks resigns as general manager of the county Water Resources Agency.

·November 2011: District attorney files charges against Collins, including two felony conflict of interest counts alleging he was financially interested in the regional project agreements.

·December 2011: A judge issues a tentative ruling that would invalidate the regional project's environmental review.

·January 2012: Cal Am withdraws support for the regional project. A judge orders Cal Am to produce reports indicating how it will secure a new water supply by the cease-and-desist deadline. Cal Am promises a new water project proposal within three months.